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What is the process of buying a house in the UK? Are there any precautions?
The British government does not restrict overseas buyers from purchasing British real estate, and also allows overseas buyers to take loans to buy houses in the UK. After choosing a house, the buyer can pay a deposit to reserve the house, and at the same time needs to hire a professional lawyer with a real estate license. The lawyer will help the buyer complete the subsequent home purchase process, including: investigating the property, drafting the contract and confirming the signing time, completing the property settlement and house registration, etc. If a buyer takes out a loan to purchase a home, they need to time their purchase.
1. What is the process of buying a house with full payment in the UK?
Buyers need to complete the four processes of reserving a house, inspecting the house, signing a contract to purchase the house, and transferring the property with the assistance of a lawyer.
1. Reserve the house
After selecting the house, the buyer pays a deposit to the developer (seller) to reserve the house. Usually, the deposit will be directly deducted from the house payment after signing the formal purchase contract. Once a buyer has selected a home, they should notify their attorney. Before formally signing the purchase contract, the lawyer will contact the developer (seller) lawyer to obtain relevant information, and at the same time conduct an in-depth investigation of the developer (seller) and the property to protect the rights and interests of the buyer.
Official website of the British Land Registry
British real estate information is public. Lawyers need to check the availability of properties on this website. After buying a house in the future, the buyer's ownership will also be registered on this website
2. House inspection
House inspection is an essential part of the process of buying a house in the UK. Generally, before signing a house purchase contract, buyers need to entrust a professional agency or professionals to inspect the house. After the home inspector completes the inspection, he or she will provide the buyer with a home inspection report that includes the quality of the home and the estimated value of the property.
A home inspection generally takes one month, but the specific time will vary according to different home inspection agencies.
Schematic diagram of house inspection items
The picture shows the items of house inspection. It can be seen from the picture that the inspection involves all aspects of the main body of the house
3. Sign a contract to purchase a house
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The purchase contract should generally be completed within 28 days after the buyer pays the deposit. When signing a contract, the buyer should pay 10% to 30% of the total house price as a down payment.
After the buyer’s lawyer confirms that there are no problems with the developer (seller) and the property, he will draft a contract with the developer (seller) lawyer and determine the signing date. The buyer’s lawyer is obliged to explain the contents of the contract to the buyer in detail, including the buyer’s rights and obligations.
After the buyer confirms that it is correct, the house purchase contract can be formally signed. After signing, the lawyers of both parties will be responsible for exchanging the contract. According to British law, once the contract is signed, the buyer is obliged to purchase the property.
British House Purchase Contract Template
The picture shows a screenshot of the house purchase contract template published by the British legal website LAWDEPOT
4. Transaction and transfer
Contract signing After that, the buyer's lawyer will contact the local land bureau to register the property, obtain title and land certificates, and transfer the ownership of the property to the buyer's name. When handling the property settlement, the buyer should pay the remaining payment and a certain amount of stamp duty, land registration fees and other miscellaneous fees as required by law.
How British Stamp Duty is Collected
British House Purchase Stamp Duty is levied in a stepped manner
2. What is the difference between buying a house with a loan and buying a house with all the money?
In the UK, new homes are generally off-plan, and the lender can submit a loan application half a year before handover; while second-hand homes are existing homes, there will be bidding when selling second-hand homes in the UK, and sellers are more willing to pay in full. Yes, it may be too late to get a loan, so if you need a loan to buy a second-hand house, you must be mentally prepared in advance.
1. What conditions need to be met to buy a house with a loan in the UK?
Generally, overseas people who are over 18 years old and have sufficient income and repayment ability can get a loan to buy a house in the UK.
However, each bank has different requirements for lenders in terms of loan amount, term, interest rate, etc. For example, Bank of China (UK Branch) stipulates that applicants can borrow up to 80% of the loan, and the loan term is 15-30 Year, the loan amount is capped at £5 million.
2. How to apply for a loan in the UK?
(1) Apply for a loan
The lender needs to provide the bank with personal asset certificates, income certificates, identity certificates and other relevant documents. After the bank receives the information, it will make a preliminary assessment and determine the lender's loan amount. The preliminary appraisal process takes about a week to complete. If the lender can accept the loan amount and other terms based on the preliminary estimate, the home inspection can begin.
Bank of China (UK Branch)’s requirements for application materials
Bank of China (UK Branch) requires borrowers to provide passports, salary slips, tax payment certificates and other materials
< p>(2) Bank reviewThe bank will review the borrower's identity, income, repayment ability, as well as the legality and estimated value of the property. The bank will refer to the property valuation in the home inspection report and the lender's financial situation to determine the final loan amount.
(3) Sign a loan
After the lender and the bank reach an agreement on the loan amount, loan interest rate and loan period, they can sign a mortgage contract. Thereafter, the lender must repay the loan as required by the contract.
Bank of China (UK Branch) loan interest rate reference
Loan amounts and proportions are different, and interest rates are also different. The picture data is a screenshot from September 2016
In the UK , the bank lends directly to the account of the developer (seller) lawyer, which is different from domestic banks paying directly to the developer (seller). In actual operation, the regulations of each bank shall prevail.
3. What should you pay attention to when buying a house in the UK?
When buying a house in the UK, you should pay attention to three aspects: house inspection, delivery time and account opening.
1. Is a house inspection necessary to buy a house in the UK?
If you buy a new house, the home inspection agency will inspect fewer and lighter items. Mainly check whether there are cracks in doors, windows, balconies and other parts, whether the door handles of the house are flexible, whether the water pipes in the kitchen and bathroom are easy to use, and other basic and superficial problems. After all, the equipment in the house is new, and generally there will be no problems.
But if you buy a second-hand house, be sure to ask a professional home inspection agency to carefully inspect it. Including issues such as whether the pipes are unobstructed, whether the main body of the house is infested by insects, whether the walls are seeped and damp, etc. Buyers need to have a good understanding of the structure of the house, including surface conditions, groundwater and mineral conditions, so as not to affect future occupancy.
Photo of the work of home inspectors
The picture shows a home inspector in London checking the condition of the kitchen of a second-hand house
2. How long does it take to get it after buying a house? key?
Most new houses in the UK are off-plan, so the property delivery takes a long time, generally about one year after signing the contract; while second-hand houses are existing houses, and the property can be delivered soon after the contract is signed. Can get the key.
3. Do I need to open a British bank account to buy a house?
If you buy a house with full cash, you do not need to open an account. If you buy a house with a loan, you need to open an account before signing the contract.
Buyers who plan to take out a loan to buy a house in the UK should pay attention to the time for submitting a loan application. It is recommended that buyers confirm that they have loan qualifications before proceeding with other transaction processes.
Data sources: British government official website (GOV.UK), Bank of China (UK Branch)
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